S&P 500 hit another all-time high, thanks to strong economic recovery. Apparently, the current environment is very favorable to corporations, so many of them, particularly those listed under the S&P 500, reported phenomenal profits, which further propelled stocks up to a record at the end of last week.
To be more specific, about 87% of S&P 500 companies posted better-than-expected results. Twitter and Snap topped the rally in social media companies as sales beat forecasts. American Express also saw a sharp jump in shares, after adding a record number of new customers to their tony Platinum card in the second quarter.
So, S&P 500 rose 0.91% last Friday, thereby pushing the index 97% higher from the depths of the pandemic.
And even if there is another outbreak of coronavirus because of the delta strain, many investors are still betting on a sustained economic recovery that will fuel corporate America. Evercore ISI chairman Ed Hyman said retailers now have more options to push higher prices to consumers, which will drive revenue growth in the coming quarters.
Jeffrey Kleintop, chief strategist at Charles Schwab also said earnings reflect a surge in economic activity, so fears that stocks are overvalued are less powerful to the market right now simply because earnings are growing at a faster pace.
Other important events for this week are:
- data on US home sales (Monday);
- data on US durable goods (Tuesday);
- CPI report from Australia (Wednesday);
- FOMC statement and press conference (Wednesday);
- data on US oil reserves (Wednesday);
- policy decision of the Federal Reserve (Wednesday);
- unemployment report from Germany (Thursday);
- data on US GDP and jobless claims (Thursday);
- report on GDP growth and CPI from Germany (Friday).
